Atlas Engineered Products Reports Seven Month Year End Financial and Operating Results

NANAIMO, BC, April 30, 2019 /CNW/ - Atlas Engineered Products ("AEP" or the "Company") (TSX-V: AEP; OTC Markets: APEUF) is pleased to announce its financial and operating results for the seven-month year ended December 31, 2018. All amounts are presented in Canadian dollars.

YEAR END HIGHLIGHTS AND SIGNIFICANT SUBSEQUENT EVENTS

To better align its financial reporting with the calendar year and that of its industry peers, AEP changed its fiscal year-end to December 31, from May 31. AEP's transition year is for the seven-month period ended December 31, 2018, with the comparative period being the twelve-month period ended May 31, 2018. For additional information see the Notice of Change of Year End filed by AEP on SEDAR on January 2, 2019.

Financial Highlights

Selected Financial Results for the Seven and Twelve Months Ended
	December 31, 2018	May 31, 2018
Revenue from Existing Business	$10,477,215	$10,340,571
Revenue from New Acquisitions	2,875,461	1,256,605
Total Revenue	13,352,676	11,597,176
Cost of Sales	10,241,447	8,725,350
Gross Profit	3,111,229	2,871,826
Gross Margin %	23.3%	24.8%
Operating Expenses	4,685,262	2,700,621
Operating (Loss) Income	(1,574,033)	171,205
Net Loss After Adjustments and Taxes	(1,250,086)	(4,954,765)
Adjusted EBITDA	(658,423)	1,420,554
Loss per Share, Basic and Fully Diluted ($ per share)	0.04	0.29
Cash on Hand	1,593,762	867,384

• Overall revenue for the seven month year ended December 31, 2018 was $13,352,676, up from $11,597,176 for the previous year 12 months ended May 31, 2018, representing an overall growth in total revenue from the prior period of 15.1%.
• This increase in total revenues was driven by the completion of acquisitions during the period and the organic growth of AEP's existing operations.
• During the transition year ended December 31, 2018, AEP completed the acquisition of Satellite Building Components Ltd. ("Satellite") in August 2018, Coastal Windows Ltd. ("Coastal") in October 2018, and Pacer Building Components Inc. and Tandelle Specialty Inc. (together, "Pacer") in November 2018.
• Revenues from AEP's founding Nanaimo operations for the seven-month year ended December 31, 2018 were $7,307,852 compared to revenues of $6,151,331 for the same seven-month period ended December 31, 2017, representing period-over-period growth of 19%. 
• Revenues from Clinton Building Components Ltd. ("Clinton") for the seven-month year ended December 31, 2018 were $3,182,638 compared to $2,557,687 (unaudited) for the comparable seven-month period ended December 31, 2017, representing period-over-period growth of 24%.
• Gross margin ratio for the seven-month year ended December 31, 2018 of 23.3% was consistent with AEP's gross margin ratio for the twelve-month year ended May 31, 2018. 
• Cash on hand during at December 31, 2018 increased to $1,593,762 from $867,384 due in part to the acquisitions completed during the period and to the $4.1 million raised in AEP's a non-brokered private placement financing. 
• Subsequent to the year ended December 31, 2018, AEP completed the acquisition of South Central Building Systems Ltd. located in Southern Manitoba.

Integration and Optimization Strategy

Dirk Maritz, President and CEO of AEP stated "During our transition year ended December 31, 2018, we executed on our strategy of acquiring and operating profitable, well-established companies in Canada's truss and engineered products industry. Since going public on November 6, 2017, we have grown our Canadian footprint to six plants operating in British Columbia, Manitoba and Ontario. We are strengthening the financial and operational performance of our acquisitions through standardized best practices, dedicated sales outreach, cost efficiencies and extended product mix. We intend to continue this strategic acquisition path moving forward."

"The pace at which we are growing is the result of our first-mover advantage and business strategy. Our industry is fragmented, made up mostly of independent operators producing specialized products. We are consolidating these narrow-focused operations and delivering a fully integrated service to builders and developers both big and small. We believe that there continues to be a significant opportunity for ongoing growth through strategic acquisitions and organic improvements that contribute to bottom-line profits."

Mr. Maritz continued, "As part of our integration and optimization strategy we have decentralized our corporate structure to operate as regional hubs supported by a lean head office to provide the most effective means of managing a geographically diverse operation. Our head office team has been structured to provide corporate support to regional management teams in the areas of Corporate Strategy, Operational Excellence, Organizational Development and Human Resources, Finance, Procurement, and IT Infrastructure.  Combined, we currently employ 179 people as of year-end. Our organization structure is comprised four executive team members, six senior team leaders (mainly comprising of operational leadership) and 169 operational staff dispersed throughout our locations. Forty percent of the executive and senior leadership team are female."

About Atlas Engineered Products Ltd.

AEP is a newly listed growth company, as of November 2017, that is acquiring and operating profitable, well-established operations in Canada's truss and engineered products industry.  We have a well-defined and disciplined acquisition and operating strategy enabling us to scale aggressively, giving us a unique opportunity to consolidate a fragmented industry of independent operators.

Forward Looking Information

Information set forth in this news release contains forward-looking statements. These statements reflect management's current estimates, beliefs, intentions and expectations; they are not guarantees of future performance. The Company cautions that all forward looking statements are inherently uncertain and that actual performance may be affected by a number of material factors, many of which are beyond the Company's control.  Such factors include, among other things: Risks and uncertainties relating to the Company, including those to be described in the Annual Information Form filed by the Company on June 1, 2018 and the Management's Discussion and Analysis ("MD&A") for the Company's seven-month year ended December 31, 2018.  Accordingly, actual and future events, conditions and results may differ materially from the estimates, beliefs, intentions and expectations expressed or implied in the forward-looking information. Except as required under applicable securities legislation, the Company undertakes no obligation to publicly update or revise forward-looking information.

Selected Financial Information

Except as noted below, the financial information provided in this news release is derived from the Company's audited financial statements for the transition year ended December 31, 2018 and the related notes thereto as prepared in accordance with International Financial Reporting Standards ("IFRS") and related IFRS Interpretations Committee ("IFRICs") as issued by the International Accounting Standards Board ("IASB").  A copy of the Company's audited financial statements for the transition year ended December 31, 2018  and the related Management's Discussion and Analysis is available on the Company's website at www.atlasengineeredproducts.com or on SEDAR at www.sedar.com.

Financial information for the Company's acquisitions are included in the Company's audited financial statements from the date of acquisition.  Financial information for acquired businesses for periods prior to the date of acquisition were prepared by management and have not been reviewed or audited by independent auditors.

Non-GAAP / Non-IFRS Financial Measures

Certain financial measures in this news release do not have any standardized meaning under IFRS and, therefore are considered non-IFRS or non-GAAP measures. These non-IFRS measures are used by management to facilitate the analysis and comparison of period-to-period operating results for the Company and to assess whether the Company's operations are generating sufficient operating cash flow to fund working capital needs and to fund capital expenditures. As these non-IFRS measures do not have any standardized meaning under IFRS, these measures may not be comparable to similar measures presented by other issuers. The non-IFRS measures used in this news release include "EBITDA", "EBITDA Margin", "adjusted EBITDA", and "adjusted EBITDA Margin". "EBITDA" is calculated as revenue less operating expenses before interest expense, interest income, amortization and depletion, impairment charges, and income taxes. "EBITDA Margin" is EBITDA expressed as a percentage of revenues. "Adjusted EBITDA" is EBITDA after adjusting for share-based payments, foreign exchange gains or losses and non-recurring items. "Adjusted EBITDA Margin" is Adjusted EBITDA expressed as a percentage of revenues.

NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.

SOURCE Atlas Engineered Products Ltd.

Atlas Engineered Products Ltd., Dirk Maritz, CEO & President, Phone: [phone], Email: [email protected], Unit 102, 6551 Aulds Road, Nanaimo, BC V9S 5X9, www.atlasengineeredproducts.com; Atlas Engineered Products Ltd., Bill Woods, Chief Financial Office, Phone: [phone], Email: [email protected], Unit 102, 6551 Aulds Road, Nanaimo, BC V9S 5X9, www.atlasengineeredproducts.com; For investor relations please contact: Rob Gamley, Phone: [phone], Email: [email protected], Contact Financial Corp., 810 - 609 Granville St., Vancouver, BC V7Y 1G5